ACTA - Criminal Enforcement

Section 3

CRIMINAL ENFORCEMENT

The European Union released the first official consolidated draft of ACTA on Wednesday, April 21. This blog post contains a summary of the section on Criminal Enforcement - including criminal offenses, criminal liability and penalties and sanctions, seizure, forfeiture, confiscation, and destruction, ex officio enforcement, and the rights of the defendant and third parties. It provides an analysis of how this latest text differs from previous leaked versions.

Article 2.14: Criminal Offenses

The first paragraph in this section introduces some development in the meaning of “financial gain.” The new official text elaborates on the meaning of financial gain, describing it as including “the receipt or expectation of receipt of anything of value.” According to the leaked text, Mexico proposed that financial loss, or money which right holders would be deprived of as a result of illegal activities, should be included in the definition of “financial gain,” but there is no indication that this proposal carried forward. The leaked text shows that Japan and the United States sought the addition of the word “private” to precede the term “financial gain” in Paragraph 1(b) while Australia and New Zealand insisted on its absence. “Private” is not explicitly included in the new official text.

The second paragraph shows that there has been increased discussion on criminal penalties for trademark infringement. Among the notable modifications is the bracketed status of the formerly accepted “its territory” in 2(a) (regarding a mark which is identical or cannot be distinguished from a trademark registered in "its territory"), which suggests that at least one party may potentially be seeking registration in any signatory's territory,a significantly broader position than the previous text. Further in the second paragraph there is now proposed additional clarification on the user of the label (by the importer or user or, by a third party with the knowledge of the importer or user, for willful trademark counterfeiting).

The third paragraph, providing for criminal penalties towards users who without authorization use audiovisual devices to copy motion pictures or other audiovisual works, shows a continued lack of agreement among the negotiating countries. Like the leaked draft, the recent official text indicates that at least one party has asked for deletion of the section. Among notable proposed additions into this section is “theatre manager” as a party who may provide authorization for copy of the work (those who may need to provide authorization to avoid criminal liability: holder of copyright [or related rights] [or the theatre manager]).

Article 2.15: [Criminal] Liability and Penalties [and Sanctions]

The introductory first paragraph has been removed, marking a slight shift in tone from the former text. Mandatory penalties “that include sentences of imprisonment as well as monetary fines” from the leaked text have been removed as an introduction, and are now codified in the third paragraph in Article 2.15, a proposed section for Penalties and Sanctions. The new official text includes proposed footnotes from the Negotiator, stating that “there is no obligation for a party to impose both imprisonment and monetary fines in parallel” and that it “does not imply an obligation for a Party to provide for the courts a possibility to impose both penalties in parallel.” Nevertheless, penalties of imprisonment as well as monetary fines remain an option, as no clause exists disallowing the imposition of such parallel penalties. With domestic pressure to not be seen as pirate-friendly, and to follow increasing enforcement standards of other signatory nations, it is not unreasonable to find some signatory nations adopt parallel penalties.

It is worth noting that the paragraph on “Inciting, Aiding, and Abetting” remains in the agreement. As Gwin Hinze from EFF has mentioned (http://www.eff.org/deeplinks/2010/04/eff-analysis-officially-released-acta-text), the language of “inciting, aiding and abetting” comes from the draft 2007 EU IPR enforcement criminal sanction directive and does not currently exist in United States copyright laws. A number of commentators have expressed concern about the potential expansion of liability, particularly following Italy’s recent indictment of Google’s executives. The new official text indicates that at least one delegation opposes this paragraph, though no mention exists for proposed deletion. The entire paragraph is now bracketed, as well as the word “inciting” specifically.

Article 2.16: Seizure, Forfeiture/[Confiscation] and Destruction

In the new version of this section, every mention of “confiscation” has been bracketed, indicating possible removal, including in the title.

In the first part of this article, titled Seizure, negotiators have put aside the proposal put forth by the United States and Japan as introduced by the leaked text, in favor of the European proposal. New language has been proposed stating that items subject to seizure need not be individually identified, as long as they “fall within specified categories.”

The second portion of Article 2.16, titled Forfeiture/Confiscation and Destruction, shows a greater deal of debate. New language has been introduced or questioned throughout, particularly on forfeiture. Three new additions introduced in the new text propose that the article explicitly clarify that forfeitures go “to the state.”

With respect to the disposal of counterfeit goods to channels outside the channels of commerce, the conditional text mandating “that the goods are not dangerous for the health and security of persons” is now bracketed, possibly for removal. Following this text, new language has been proposed suggesting that it be disposed “in such a manner as to avoid any harm caused to the right holder.”

Article 2.17: Ex Officio Criminal Enforcement

The proposed addition of “competent” as a descriptor for an ex officio authority has made it into the new text. Whether they may, by their own initiative, initiate “investigation and/or legal action” or “investigation or legal action” has not yet been finalized.

Article 2.X: Rights of the Defendant and Third Parties

This article, which seeks protection of the rights of defendants and third parties, as proposed by the EU in the most recent leak, remains in brackets in the new published draft. “Defendants” is singly pointed out in its own brackets in the new version, indicating that at least one party may be seeking the removal of an explicit guarantee of rights and protection for defendants.